NY Times: Do walkable neighborhoods increase real estate value?

Whether it's streets arranged to form small walkable blocks or mixed-use development designed to make sidewalks a vibrant and welcoming setting for daily interaction, good urbanism is at the heart of every walkable place.

The NY Times Business section took a look at this trend with regard to home values:

"A study published in August by C.E.O.’s for Cities, a group of urban redevelopment advocates, found that in many ways, the street corner beats the cul de sac. It looked at the sales of 90,000 homes in 15 markets to estimate how much value was associated with something called the Walk Score. Using a 100-point scale, this score rates the number of destinations, including libraries, parks and coffee shops, within walking distance of a home...

The study found that houses with above-average Walk Scores commanded a premium. It was as much as $30,000 in cities like Charlotte, N.C., Chicago, Sacramento and San Francisco, wrote Joe Cortright, the study’s author and an economist at Impresa, a consulting firm in Portland, Ore."

Cortright (who spoke at the 2009 CNU Transportation Summit in Portland) contends that "the spike in gasoline prices in 2005 popped the housing bubble. He found that distant suburbs had the largest declines in home values, while prices in 'close in' neighborhoods, typically those that were the most walkable, held up or, in a few cases, increased."

The Times also gets at the equally important question, citing zillow.com data, of whether walkable urbanism holds its value better in a downturn. While the results are not comprehensive, intriguing results point to yes.

Comments

This story in the Times was exceptionally well-framed. Citing the mantra that "location, location, location" drives home value, the author says it appears the standard list of what defines a desirable location — attractive neighborhood, good schools, low crime — should be supplemented with a new factor: walkability.

The author Damon Darlin makes a number of clever and resourceful moves in this article — starting with checking the scores at Walscore.com of a few famous residences, the White House (a "walker's paradise" at 97 points) and Playboy Mansion (25 points).

Darlin makes great use of Joe Cortright's fine Walkscore study for CEOs for Cities, which is now a few months old and was completed during a time of rising and falling home prices, allowing for few conclusions about whether walkability provided home owners any cushion in a down market. Darlin deserves extra credit for getting the chief economist at Zillow.com to make the following observations that properties with more proximity to downtown and nearby destinations (and presumably more walkability) have retained more of their value:

MR. HUMPHRIES is also looking for other trends to tease out of the data, taking a stab, for example, at examining how home prices are related to proximity. He can personally relate to this. He lives in Sammamish, an eastern suburb of Seattle with a Walk Score of 29, where average home values are down 21 percent from their peak in 2007. Prices fell 14 percent in the centrally located Green Lake neighborhood of Seattle, with a score of about 89 — a decline comparable to that of other more urban neighborhoods of the city.

Using Zillow data, he looked at concentric circles of major metropolitan areas and, with some exceptions, it held true that property values closer to the city center held up. One anomaly is Detroit, where neighborhoods near the city center have been devastated by population loss, which in turn has bred fires, vandalism and crime.